Omer (00:16.240)
Welcome to another episode of the SaaS Podcast.
I'm your host, Omer Khan and this is the show where I interview proven founders and industry experts who share their stories, strategies and insights to help you build, launch and grow your SaaS business.
In this episode, I talked to Chris Ronzio, the founder and CEO of Trainual, a SaaS product that helps companies to onboard employees, automate training, systemize processes, and put everything about your business in one place.
Paid advertising doesn't work well.
That's what I often hear from founders of SaaS companies.
They tell me that they've tried Facebook and Google Ads, but it was too expensive to acquire customers, so they focused on other growth strategies like content marketing instead.
And when we hear things like that, it's easy to dismiss a growth channel and do what everyone else is doing.
But sometimes we find success by doing what everyone else is not doing.
Chris Ronzio was running a consulting business in Arizona.
He realized that many of his clients were struggling with the same issue.
So one day he hired a developer to build a simple tool for him and he started using that tool to help his clients run their business businesses better.
Some years later, Chris decided that he'd had enough of consulting.
He really wanted to build a product business.
And he realized that the simple in house tool he'd been using with his clients all those years could actually be turned into a SaaS product.
He decided to go all in with his new business, and he quickly got to a few thousand dollars in monthly recurring revenue by selling his product to his consulting clients.
But finding more customers beyond his clients wasn't so easy.
He tried a bunch of things that either didn't work or had disappointing results, but he kept looking and trying different things.
And eventually he found a way to get customers by using Facebook ads.
Initially, it was pretty expensive to acquire customers, but Chris kept at it and eventually he figured out how to get customers profitably.
He knew how much a customer was worth, so he knew how much he could spend to acquire a new customer.
And once he had that working, he took a calculated risk.
He started spending as much as he could on Facebook ads.
At one point, he had over $300,000 worth of credit card debt.
But it enabled him to grow the business much faster.
He went from zero to over $2 million in annual recurring revenue in less than 18 months.
In this interview, we talk about the ups and downs that Chris experienced.
We explore some of the mistakes he made, what he learned from those mistakes, and we dig into exactly what he did with his Facebook advertising campaign to acquire those customers.
So I hope you enjoy it.
Chris, welcome to the show.
Chris Ronzio (03:06.870)
Thanks so much, Omer.
Great to be here.
Omer (03:09.350)
So I always like to get inside my guest's head and find out what drives or motivates them.
So is there a favorite quote that you have that you can maybe share with us?
Chris Ronzio (03:16.420)
Yeah.
So actually, we're moving into a new office right now, and I think the most appropriate quote to share would be the one I'm about to print on my wall.
And that's from a song.
It's called Dead Man's Dollar.
And the quote is, I want to make a life, but I want to live there, too.
And I think it sums up perfectly the stress we have as entrepreneurs to just keep building and building and building, and then you don't get to enjoy what you've built.
So it's just a constant reminder for me that that's what I'm waking up to do every day.
Omer (03:41.870)
That's great.
I like that.
It reminds me of a book I read called the Now Habit by Neil Fiore.
And in there, he has this concept of the unschedule.
And so instead of scheduling all the work stuff you have to do, you start by scheduling all your personal stuff.
Everything from your sleep, your meals, your exercise, your friends and family time.
And then what's left?
You use that to think about scheduling work.
And I think part of it is more about helping people who procrastinate, which is one of the reasons I read the book.
But, yeah, it's a similar concept in terms of always making time for the other important things in life.
Chris Ronzio (04:18.960)
Oh, I love that.
It's like, you know that old saying with filling a cup with rocks and sand and pebbles and water and, you know, things just fill up with whatever space they're given.
So if you put the important stuff on your calendar first, work can fill in the space around it.
But if you don't block out that time, you'll never have time for the things you really want to do.
Omer (04:37.250)
Yeah, absolutely.
Okay, so I want to tell you a story, and there's a bunch of stuff I want to talk about before we get into how you came up with the idea for Trainual, but just briefly tell us, what problem are you solving with Trainual and for who?
Chris Ronzio (04:54.130)
Yeah, so Trainual is a product for documenting what you do and training your employees on how to do it.
So the big problem I saw is that for a business to really scale, you've got to be able to get the knowledge out of your head and into a place that you can delegate it to others so that, that it happens repeatedly.
A lot of people do this with documents and Google Drives and Dropbox folders.
And for companies with more than a few people, that gets really messy.
But in working with a lot of other companies, I saw there was just this huge gap between documents and then more enterprise training systems.
And so I wanted to come up with something that was simple, that would let you just build out the brains of your business, the knowledge of the company, and then communicate it roll by roll to everyone that needs to know it.
Omer (05:37.210)
Now, you have seen some great growth with Train your.
You went from almost zero to $2 million in annual revenue in under 18 months.
Chris Ronzio (05:53.210)
Yeah, it's been a roller coaster.
Omer (05:55.690)
And that's what we're going to talk about.
And I want to spend the bulk of the time talking about exactly what you did to make that happen, some of the ups and downs along the way and what we can learn from that.
But before we get into that, tell me a little bit about what you were doing before you started this business.
Chris Ronzio (06:14.890)
So I had a few different chapters.
My first was a video production company.
I started in high school, grew it through high school and college, and eventually we were doing productions, youth sporting events all around the United States.
And so part of that, a big part of that was training camera operators that we would find on Craigslist or some other website to show up and shoot an event and do it with all of our processes.
So I was always operations oriented and always making checklists and using online tools.
And so I moved away from my business, which was in Boston, to Arizona, where I am now.
And I was running the company remotely and just fine tuning our systems and processes and training and software.
And I just loved it.
And as I started to talk to other entrepreneurs, I saw everybody kind of has this need of wanting to systematize their business, but maybe they don't have the time to focus on it.
So in 2013, I sold that business, the video business, and started a consulting firm working with other companies to do exactly, exactly that.
So we would go in, totally tear apart their workflows, and then build training.
I remember I was training, I was working with an auction house that we totally redesigned their whole process for listing items and selling off items.
And at the end of it, they asked me to get up in front of everyone and deliver this big training presentation.
And other companies would ask me to do standard operating procedures or write manuals.
And so I was building this team, creating manuals, creating operations guides, and we built Trainual as A product for ourself.
So that's really where it started.
Omer (07:39.670)
And one of the companies that you worked with is the same company that you're recording this interview from at your offices.
Chris Ronzio (07:48.390)
Yeah.
So I'm borrowing a room at Design Pickle, which is right around the corner from my house, and they've been using Trainual since almost day one.
Omer (07:56.710)
Now, I had Russ.
Russ Perry, the founder of Design Pickle, on the show a couple of years back.
So I think he was on episode 139.
And you have known Russ.
Like, you guys have been friends for a while, right?
Chris Ronzio (08:14.150)
Yeah, about 10 years now.
Omer (08:16.550)
Cool.
Well, say hi to Russ for me when you see him.
Chris Ronzio (08:19.030)
I will.
He's right through the wall.
I'll wave to him.
Omer (08:23.430)
So I remember with Russ that he also took Design Pickle from pretty much zero to over $2 million in about two years.
So, number one, it's like, what.
What are you guys drinking that you guys are able to kind of do this?
And, you know, both of you have done this.
And I guess, secondly, you beat him a little bit.
Right.
So you got there a little faster.
Yeah.
Chris Ronzio (08:45.080)
It's funny, when Trainual was really starting to take off, I. Russ sent me his MRR numbers month by month, and I had him posted next to my laptop.
It was like a challenge to myself to stay ahead of their curve.
So hopefully I can keep.
Omer (08:58.820)
All right, so let's kind of start the story on.
So you're working with these consulting clients, and you're helping them.
You see the need.
How did that turn into the first product?
How did you go about building that?
Did you.
Did you build it yourself?
Did you hire people?
Chris Ronzio (09:17.780)
Yeah.
So it was kind of a gradual process.
So the first thing I noticed was when new employees started a company, maybe you give them some kind of new hire packet.
And so I was in this entrepreneurship group, and I had never done anything like that.
And so when I was hiring someone, I asked around, and someone sent me their template, and I ended up sending it to someone else.
And it was like this new hire template.
This packet was circulated around the group.
And so that always stood out to me, as, you know, people need some kind of orientation to the business.
And then as the company grew, everybody talks about job descriptions and roles and responsibilities and templates and systems for that and scorecards and how do you measure people?
And so, you know, as I was building my consulting firm, that was always top of mind for me.
A few years, in 2000, late 2014, I met these kids at ASU actually, they were part of an entrepreneurship group there.
I was doing my consulting thing.
I was working with a retailer that had a T shirt store near the university.
And they would hire students that would turn over really quickly.
You know, they'd work for a semester, then they'd go home.
So they were always.
Had this revolving door.
They were always replacing people.
And so I met these few developer students at ASU that were trying to build this HR product and they were focused.
Omer (10:30.670)
Sorry, I was gonna.
Just for our international audience.
ASU is Arizona State University.
Yep.
Yeah.
Chris Ronzio (10:36.090)
Thank you.
Omer (10:36.450)
Sorry.
Chris Ronzio (10:37.090)
So they were building this, this HR system for enterprise clients.
They wanted to build a simple HR tool.
And so it was kind of a senior project of theirs.
And when they graduated, they tried to sell it and they couldn't get any customers.
So I reached out to them and I said, well, maybe I could use this for, for my small business clients.
And they said, well, we're shutting it down.
We're moving to San Francisco.
We're, we're, we're getting jobs.
They actually ended up in Y Combinator and built some cool stuff.
But this product is the code that just kind of was broken and never commercialized was sitting there.
And so I acquired the code from them and hired some contract developers and turned it into this really simple small business onboarding training product.
And that was, that was the birth of Trainual.
So when I first launched it, I thought it was going to be some massive thing.
I, you know, I emailed everyone I knew, and I think I had four customers or something, so I just kind of tucked it back into my consulting firm and paid no attention to it for a few years.
Omer (11:32.050)
How long did it take to build the product?
Chris Ronzio (11:33.890)
Once we took the code from them, it was only about, about six weeks of just tweaking things and adding a couple new features until it was ready.
Omer (11:43.090)
And, you know, I think it's interesting that a lot of times when people.
Well, first of all, we often talk about, well, how did you go and validate the idea?
But in your case, you've kind of already done that because you were working with people and you were seeing this problem time and time again with consulting clients.
Chris Ronzio (12:00.040)
Yeah, So I had validated it without the tech, and then once I had the software, it was just a, it was kind of like a tool on my shelf.
You know, I, I would take it out for companies that were hiring and scaling and at the point where they needed to write down what they did.
And we used it in, in house for the next three years before it really became a Business of its own.
So that's kind of a separate story.
Omer (12:20.040)
So at that point, there was no intention to sort of productize it and sell it as a product.
It was just part of the consulting offering and a.
And a tool that you were using yourself.
Chris Ronzio (12:29.360)
Right.
I thought it was cool that we had some IP of our own as a consulting business, but we were focused on consulting.
Omer (12:35.160)
Okay, so at what point did it become a product?
Chris Ronzio (12:39.360)
So late 2017, I think trainual got written up in a couple blog posts.
One was on kissmetric, and it was one of those posts that you, you know, it's a roundup of different tools.
And so I know for a fact they did no research with this post.
It was probably some kind of outsourced blog post, and they just put us on the list.
But whatever it was, it generated a little bit of traffic and a little bit of interest for us.
And so we started getting some inbound inquiries, which we had never really had.
And then at the same time, my consulting business had grown.
We had five employees, and because we were taking on more overhead, we needed to raise our prices.
So we were getting a little further away from the smaller businesses that I liked working with and starting to work with bigger companies.
And so I had this moment where I thought, you know, if I fast forward this a few years, am I just going to be a small boutique consulting business working with a handful of companies, or am I going to really try to make a big impact?
And I saw Trainual as the tool that we could make the big impact with.
So instead of consulting, instead of charging for our time, we decided to just kind of do a 180 and use all the expertise and process and operations to be marketing content.
And then what we would sell would be the software.
So it was a pretty, you know, burn the ships kind of moment where we stopped consulting entirely and prepared to launch the software as a separate business.
Omer (13:55.030)
What evidence did you have that this bet was going to pay off?
At the time, very little.
So why do it?
Because the consulting business is still keeping the lights on and paying the bills.
Chris Ronzio (14:07.270)
Yeah, I had my second child, my second son, leading up to this decision, and I wanted to be around more for the family.
And I saw the consulting business as just something where I was trading a lot of time.
I was selling my time, I was doing workshops, I was starting to travel around the country and get hired, and the day rates were great.
It wasn't something I wanted to do forever.
And so I, you know, we talked about Design Pickle.
I saw my friend Russ and other friends growing their businesses much more predictably in something that wasn't tied to their time.
And I thought, well, I've got this product, I've got Trainual, and I've got the expertise and the experience and the story to go with it.
And I sold my first company, and a lot of that was because of my systems and processes.
So why don't I just pour that all into the software product?
And, you know, it was a tough decision, actually.
We made a few mistakes along the way.
We took on a few consulting projects to try to pay the bills, and they were the worst projects we took on because I was totally not focused on consulting anymore.
So it was like the.
The.
The worst checks I ever cashed.
Omer (15:10.050)
Yeah, tell me a little bit more about that.
So you decide to go all in.
You're focusing on building this product, and then you're like, oh, wait a minute.
Still got to keep.
They're paying the bills.
Let's take on some consulting work.
That's always a bad sign, right?
In terms of like, did you go out looking for work, or were these just people that came along and you were like, oh, let's just do it?
Chris Ronzio (15:30.520)
No, it was while this decision was happening, you know, we started rebuilding Trainual initially because we thought we had a little bit of extra capacity, and instead of going to fill that capacity with a new client, let's treat Trainual as our own client.
And so for maybe a month, we started to rebuild the tool.
Fall 2017.
And it was during that time when we were taking on new clients still, that we brought on three projects that really were just about getting some money in the door and covering the expense.
But our passion was increasingly going more and more into Trainual.
And so those client projects became the most incredible burden.
We didn't want to talk about it.
It was the last thing we wanted to do.
We were so excited about the software then.
Oh, yeah, we had to do this client work.
It was like homework.
And so naturally, those projects didn't go that well.
But as soon as we wrapped those up, it was no more consulting, and we were pretty confident in that.
Omer (16:28.490)
Now, as I understand you were trying to create some buzz around the product before you actually launched.
So what kind of things were you doing?
Chris Ronzio (16:36.810)
Yeah, so the first thing I did is I hired a photographer.
So it might sound counterintuitive, but I knew that content and telling the story of what we were doing would be so important once we launched, after we launched in the future.
So I wanted pictures and videos of everything we were doing.
So we hired a photographer.
We would meet up for sessions every week.
She would come to the office, she would meet out with our team.
We, you know, we were traveling, we were doing all these things to tell the story.
And then we took down our website and you know, the consulting website and the little page we had up for Trainual and just made it a single one page, new Trainual is coming.
And it was a, like a lead page with an email address and said, stay tuned, you know, we'll tell you as soon as it launches.
And I had never done that before.
So we didn't spend anything on advertising, but just the referrals and the social media traffic that we had got us just under 200 email addresses in that fall, which, which was a good start when we wanted to launch it.
Omer (17:35.850)
So the photographer thing sounds like a strange thing to do when you're starting out.
And I want to kind of understand that a little bit more because it's almost like when someone gives you advice about starting a business and saying the first thing you should do is get business cards and you're like, really?
And so why was that important?
And did that pay off?
Chris Ronzio (17:56.850)
Absolutely.
So I think part of why our marketing and our advertising has been so successful is that it's very authentic to who we are.
It's telling stories about us.
You know, it's not overly polished, but it's, you know, it's not those animations and you know, animated, whatever they're called, explainer videos.
It's really simple.
It's just this is who we are.
We're a small team.
The pictures of the real team and our real office on the site.
And I think people can connect more to that.
And so when you're trying to get a software product off the ground, one of the main criticisms people have is, is this just a fly by night kind of company?
Is it going to be here today, gone tomorrow?
And I think we overcame that a little bit by showing the real people and the real story behind the product.
Omer (18:42.850)
Got it.
Okay, great.
So you've got this 200 email addresses and then you launched in January of 2018.
Chris Ronzio (18:52.130)
Yeah.
So January 2018 we had 27 customers that rolled over from the consulting days, so just under $2,000 in MRR and we set up a launch event.
So we booked a patio at a local hotel in Scottsdale, Arizona.
And I invited all the business owners I knew.
I invited some reporters from the local press, we invited some of the customers that had been on Trainual since the beginning, like design, pickle and we had our photographer there and we recorded videos and photos and again, just kind of made a scene of that.
We were launching this real business.
And so I think part of it was to convince myself that, you know, we're going for it.
This is a big thing.
It's.
It's like when you set a goal and you tell everyone that this is what we're doing now, you kind of have to stick to it.
And so part of booking that, the hotel, that event was just.
Just a forcing function, I think.
Omer (19:44.690)
Okay, cool.
One of the things that I was just thinking about when you mentioned the.
The photography and kind of showing the personality of the team and the people behind it, it kind of reminded me of this quote, and I can't remember where I heard this, that people buy on emotion and they justify with logic.
And people often buy from somebody that they like.
Chris Ronzio (20:10.440)
Right.
Omer (20:11.000)
And so if you can create that connection with people rather than just being this kind of homogeneous kind of product, that nobody really knows what's different about you or what the personality is or who the people are, then, you know, you're kind of probably working against yourselves.
And I still see that, like in.
In so many sites I'll go to, like, SaaS products where I often go, you know, the about page is often the first page I go to.
And I know a lot of people do that.
And when you just get a page which is kind of like, you know, some generic paragraphs and no picture or anything, it's just really hard to have any kind of connection there.
Can't remember what it was.
Maybe it was when I was back at Microsoft and like, somebody sending us some email and really just kind of going to town with curse words and how they hated this thing and how it ruined their life and whatever.
And then I replied to that email and it was very personal reply.
And I told them, thank you for this feedback, and kind of went through and explained to them and then gave them some information in terms of, hey, here's some really simple steps that you can take to actually solve the problem you're talking about.
And the reply was like, oh, I'm sorry for sending you that first message.
I didn't realize that there was kind of like a real person.
Chris Ronzio (21:39.800)
Yeah, that's funny.
Omer (21:41.240)
All right, so we've got the launch.
You've got a few thousand dollars of mrr, which mainly comes from the consulting clients buying the product.
Chris Ronzio (21:50.840)
Right.
Omer (21:51.400)
And then what are you doing to get the word out and grow the business?
And.
And let's talk about particularly some of the things that didn't work so well.
Chris Ronzio (21:59.860)
Yeah, well, I mean, the launch went well in terms of the exposure that we got, but it wasn't a massive success in terms of the customers that signed up.
So we blasted those 180 or so emails, we got some great content at the event, and then we signed up another couple dozen people.
So we ended January around 4300Mrr.
And so it was, you know, it doubled the business effectively, but we were still bleeding like crazy with our, with our team.
So right after that, we went into a Product Hunt launch.
I thought that was going to be a great way to get the word out there.
So we got it hunted by one of the top hunters.
If you haven't heard of Product Hunt, it's just a place where new products roll out.
And we decided to take the credit card form down so you could just get into a free trial.
And we had a lot of people sign up, but almost no one converted.
So again, it was another good exposure thing.
We got some good feedback, but we got very few comments customers.
We did some dumb stuff too, though.
We came up with all these messages about what Trainual actually does.
One of them was that it lets you clone yourself.
And if you can do things the same way every time, or if you can clone, you know, the work you produce in a day and have someone else start to do that work, it's like you're cloning yourself.
And so we ran with this sheep kind of mascot thinking, you know, the dolly, the lamb that got cloned, and we made sheep logos and we made sheep collateral and we sponsored some real estate event with and passed out sheep postcards.
Omer (23:27.350)
Wow, you guys really went to town with that.
Chris Ronzio (23:30.710)
We gave it a good go.
You know, again, inspired by the pickles over here, we thought, let's do something like that.
And it didn't necessarily resonate with the operations and HR crowd that buys our tool.
So that didn't work so well.
Omer (23:44.710)
So one of the things that you also did was tap into your LinkedIn contacts.
Tell me a little bit more about that and what worked and what didn't work there.
Chris Ronzio (23:53.150)
So I'm not sure you can still do this.
I think LinkedIn might have changed it, but at the time you could Export your entire LinkedIn connection database with all of their emails that they use for LinkedIn.
And so I went in, I exported everything and then I used this tool called gmass, which is a great bulk mail tool for Gmail, and I uploaded all those addresses in and I sent out this blast Message to two or three thousand people that was, you know, just explaining this pivot that I had made in this new business.
And you know, I'd say it kind of worked and it kind of didn't.
It got me on a lot of calls with people I went to high school with and random connections that had zero to do with helping my business.
It got me a couple fuse from people that I guess it rubbed the wrong way.
It got, you know, this entrepreneurship group I'm in that has a really strict non solicitation policy.
There were a few people in there that, that reported me for solicitation and it was one of those things that you just had to get the word out and deal with the repercussions later.
And so I'm glad I did it, but I don't know that it generated that, that great of results.
Omer (24:54.230)
But I think there's an important lesson here in terms of sometimes not letting the fear of rejection or failure hold you back from trying something.
Chris Ronzio (25:06.550)
Yeah, yeah, great point because you could
Omer (25:10.189)
have just said, oh crap, you know, I'm going to do this.
And some people might send me some nasty emails and I don't want to get those or you know, whatever.
I mean, obviously if you know something you shouldn't be doing is wrong, then that's a different thing.
But just sometimes it's like we come up with ideas and it's just maybe feels outside of our comfort zone.
Maybe it's about picking up the phone and calling someone instead of sending an email.
Right.
It could be something as simple as that.
But I think what you did there is just a good example of if you're listening to this now and you feel that you're kind of on the edge there where you know you need to do something, but you're just hesitant.
Just push yourself a little outside of that comfort zone and try something.
Chris Ronzio (25:54.200)
Totally.
I've got a great example of this.
So my mom is a health coach, an esthetician.
She does skincare and she was turning 60 years old.
Now my mom has like the most beautiful skin and she looks like she's 40.
But she was so afraid to post her real age when she was turning 60.
And I said, mom, like use that, that's such an asset.
Put that out there, do a Facebook post, say, look, I'm turning, I'm hitting this big milestone.
But it's because I took care of my skin that I still look good.
And it took her almost until she was 61 to do, but when she put it out there, it was the Most liked, most shared thing that she ever put out there, and she got clients from it.
Omer (26:32.060)
Wow.
Chris Ronzio (26:32.420)
And so I think you've got to be vulnerable.
You've got to be willing to say, this is what I'm up to.
This is me.
This is who I am.
This is what I'm doing.
And not be afraid of the rejection.
Omer (26:42.020)
That's a great story.
I love that.
Chris Ronzio (26:44.660)
Awesome.
Omer (26:45.220)
Okay, so some kind of mixed results with LinkedIn, but has MRR kind of changed that much yet, or are we still around 4 or 5,000 odd?
Chris Ronzio (26:57.340)
I was ticking up little by little.
Yeah, 4,000, 5,000, 5,500.
It was, you know, through the spring.
That was our experimentation time.
So we did LinkedIn, we did the product hunt launch.
We started an affiliate program.
So we use a company called Partner Stack.
It used to be called Growsumo.
We were getting partners signing up left and right, and that was almost a false positive.
I was getting really excited by all these partners that were interested, but then no one had an audience.
They weren't real partners.
You know, there were maybe 5% of them were actually active signing up anyone.
And so we had more success with that later in the year, once our volume picked up and affiliates have accounted for, you know, 10 to 12% of our revenue.
But at the time, it was just kind of something I got excited about.
And then we started doing our digital ads.
So that was really where the experimentation happened.
I got some great advice about ads in terms of what to spend and how to invest in that.
And so we just went to work.
Omer (27:51.360)
Okay, great.
And I want to dig into that.
One question I had was when you and I had talked before, you had said that you were targeting with Train, your target customer was companies with somewhere between 25 to 250 employees.
And that was sort of the sweet spot for you, right?
How clear were you about your target customer when you started?
Because, I mean, obviously, you know, the high school buddies you were talking to, which was great, but they weren't the target customer.
Right.
So did you have some idea of a target customer or was it just, let's just get the word out to everybody.
Chris Ronzio (28:30.560)
I mean, you know, when I had my consulting business, we worked with companies that were five to 50 employees.
And I knew that we could have a slightly wider target with Trainual.
But when I did the LinkedIn blast, I got a lot of messages from friends that say, oh, I'm at this massive company.
We have 5,000 people, and I think we can use some something like this.
And so I was going after anything Anyone that would get on a demo with me or do a call, I would put time into that.
But month after month I started to hone in on the right customer.
And I saw that when someone's fewer than 10 or 20 people, they're kind of inventing things for the first time.
They're coming up with the processes and they're changing them all the time.
And so they don't have consistency in what they're doing yet.
And they're still inventing new roles in the business.
When you get above that 20, 25 threshold, you likely have multiple people doing the same thing in the business.
So consistency and training becomes really important and you're also hiring more frequently.
And so onboarding people consistently or across multiple locations is really important.
And then on the upper scale, the companies that have thousands of people or have massive HR departments, they've got tools, they've got enterprise tools to accomplish this.
And really the only way we get into those companies is if a small department within those companies wants to use Trainual.
But our sweet spot over those few months definitely narrowed down to the, you know, 10, 20 to a few hundred.
Omer (29:55.100)
Okay.
And there's some good takeaways then like, number one, life is always going to be easier if you start out with some kind of target customer in mind and you can refine that as you go.
And I think that's what I'm hearing with you, is that as you kept getting the feedback, whether it was, yes, I'm interested, somebody buying, somebody saying no, somebody telling you why this isn't relevant to their.
All of those were data points that were coming in and helping you continually think about who is the right customer and who isn't.
Chris Ronzio (30:30.990)
Yeah, definitely.
And we made a couple mistakes too.
So we initially were targeting entrepreneurs.
That was who was my network, that was who I was comfortable speaking to.
It was kind of a first person dialogue.
But we saw that the people that were our most active users were HR leaders.
So they were, you know, a director of talent or, or people operations or something like that.
And all the reviews that we were getting were talking about how this onboard, you know, an automated training and automated onboarding.
And so back in March, April of 2018, we scrubbed through the website and changed all of our messaging away from the entrepreneur type messaging into some HR messaging.
And then we went like a week with no signups.
We were like, what happened?
And, and what we realized is that, that the HR user is the one that's maybe implementing it, but they're not the purchaser.
The purchaser is the office admin or the COO or the entrepreneur that's saying, yes, we need this.
I want a playbook for my business.
You should sign up for this.
Let's get it done by next quarter.
And so we flipped it right back and started messaging again to the business owners.
And it was a learning experience.
Omer (31:49.070)
Okay, so let's talk about the online advertising and what you did there.
From what I understand, this was a big driver in helping you to accelerate that growth and go from, you know, 5,6000 mrr to what, 130, 140,000 mrr?
Chris Ronzio (32:09.030)
Yeah, yeah, right.
And growing.
And so it's.
And it continues to be.
Omer (32:13.030)
And was that specifically with Facebook?
Chris Ronzio (32:16.520)
Facebook and Instagram, primarily, yeah.
But we did Google and LinkedIn as well.
Omer (32:20.360)
Okay, so this is really good because nine times out of 10, if I talk to a founder, I'll hear the same thing.
Yeah, we tried ads.
They didn't work.
We went on and we did something else.
Right.
So I want to get into this because this is a really useful lesson in terms of don't just because you hear somebody else saying that, don't just automatically dismiss that.
That's not going to work for your business.
And so I want to kind of get into that and talk a little bit about that because, again, so you're targeting these companies and Facebook.
Yeah.
I would have thought there's probably a way to reach those people, but Instagram, for a SaaS product like this didn't make the connection.
So tell me about that.
And, like, why did you decide to use both Facebook and Instagram?
Chris Ronzio (33:10.310)
Well, the simple reason is because Instagram is just like a checkbox in the Facebook ads portal.
And so we were like, yes, send it there too.
That sounds good.
So maybe it was naive, but.
So I'll go back to my consulting business.
I had a mentor that challenged me to come up with my cost of acquisition, and I had no idea what it cost me to acquire a customer because I wasn't spending anything on marketing.
And so then he asked me, well, what's your lifetime value?
And I went through all the consulting clients I had worked with and established that I had around a $14,000 lifetime value.
As a consulting business, you'd expect to have larger lifetime value maybe than a SaaS company.
So I knew the concept of, you know, cost to get a customer and then what they pay over time.
But still with that knowledge, I never spent more than a few hundred dollars on promoted posts or anything in Facebook when I was doing my consulting.
And I said the same Thing, I said, oh, Facebook ads don't work for me.
Well, of course they don't work, because I spent, like, 0.04% of what my lifetime value is, so there's no way I'm going to get a new customer.
So when we started Trainual, from the beginning, we were tracking the metrics.
So I use a tool called ProfitWell for analytics.
Amazing tool.
The team there in Boston is great.
And we plug that in right from the beginning.
And so as soon as we started with our ads with Facebook and Instagram, we knew that, okay, if we just put some simple assumptions around that a customer will stay a customer for maybe one year, maybe two years, you know, hopefully a lot longer if they implement the product.
But let's just.
Let's be conservative and say a customer's worth $1,000 or a customer's worth $2,000.
I knew I could spend up to $1,000 or $2,000 to get one customer before I would be upside down.
Over time, of course, you know, I would be lending money to myself, but that was kind of the metric I started with.
So in March, when we started our advertising, I got a tip from a contractor.
We wanted to hire a contractor to do digital ads for us.
And he said, if you don't spend at least a hundred dollars a day on one single ad, I can't work with you.
And so that was a lot of money for me.
I thought, $3,000 a month on a single ad.
And he said, yeah, if you don't spend that much, then you'll never know the Facebook won't deliver the ad.
Any random signups that you have could just be a fluke.
If you want to start developing what your funnel looks like, you need to commit to the spending.
And so we did.
So we said, all right, we're going to do this for three months.
I pulled out the credit card, and we started paying him plus the Facebook spend, and we tracked the heck out of it.
And so we were just counting our conversions that Facebook told every week to see how many we got.
And slowly, over the next few months, we were able to understand our cost of acquisition and start to build out what a funnel looked like.
Omer (35:51.830)
That's really interesting there.
Now what I want to do is dig a little bit deeper into, like, what was the ad strategy that you guys were coming up with?
And hopefully from that, we can.
If somebody's listening to this and thinking, yeah, I want to try that, but, wow, I don't want to spend, like, you were, like, $3,000 on an ad a month.
What were some of the things that you did that maybe people could do in terms of how they set up the campaign, how they target people that might make them a little bit more comfortable and maybe reduce the risks that they're not just throwing out money on a poorly designed Facebook ad campaign?
Chris Ronzio (36:30.370)
Yeah, sure.
I mean, Facebook does give you some great feedback in terms of the engagement and they give you a score of the relevance.
And so we were looking at all that feedback to make sure the ad just didn't, you know, that it wasn't horrible.
Our first idea was, you know, this is totally unapproved, but our first idea was our customer is the type of customer that knows they're trying to build out the systems in their business and they just need a better tool to do it.
And so we looked at all the books that customers might purchase, and we did this for two reasons.
So first, on Facebook, you can do interest based advertising.
And we needed some interest that was big enough that we could create an audience for our ad.
And second, we needed some book that was relevant enough to our product.
And so I looked back to the first book I read in business, which was the E Myth by Michael Gerber, and I thought, well, let's just do an ad around this book.
And we're gonna hold up the book and say, you know, if you've read this book, then you've gotten this takeaway that I also got.
You know, systems are important in your business and you just need a better way to do it.
It.
And if you're drowning in Google Docs and Dropbox folders and emails, we've got a better way.
Check out Trainual.
And that was the first ad, was me holding up this book.
And what was funny is, again, we had no rights to the book or anything, but we did it.
We took kind of took the risk.
And, you know, fast forward to a couple days ago.
I'm with Michael Gerber doing, you know, ad strategies together.
And we're working together.
So.
And I'm happy to talk more about that.
But, you know, again, it was that same fear that at the beginning we said, are we going to get shut down?
And the first step is that email that says, Facebook has approved your ad.
And so we're like, okay, we made it.
We're in under the radar.
And then we just hope no one reports it.
But what was funny was a lot of the E Myth coaches and people that were friends of his were commenting on it and saying, oh, he'd love this.
And then somebody posted A picture with him giving a thumbs up in the comment thread.
And that was pretty cool.
So we knew that they were happy to have us promoting their brand.
Omer (38:32.460)
That's a cool.
Yeah.
I want to talk about the Michael Kuber thing.
That's interesting, but how did that ad perform in the first month?
Chris Ronzio (38:39.660)
It did well.
I mean, at the first month we were converting it, you know, maybe $400 a customer, $500 a customer.
And I thought in my head, 600 would be kind of like the soft limit, you know, if it took me six months to pay back a customer, then I didn't really have the funds to keep investing in advertising every month.
But that's what I was aiming for was to stay under 600.
And we did and eventually got it down to we had some ads that were under a hundred dollars per convers version.
So it was encouraging right away.
Omer (39:07.880)
What other kind of targeting were you doing?
Did you just stick with that or did you start picking other books or different interests or what?
Chris Ronzio (39:14.440)
Yeah, we did Robert Kiyosaki's book Rich Dad, Poor dad and Cashflow Quadrant.
We did Verne Harnish's books the Rockefeller Habits and Scaling Up.
We did Geno Wickman's book Traction.
And some of those newer authors just didn't have the same size of their following on Facebook.
So we of kind couldn't pick them as interests to target.
And so the E myth definitely worked the best.
And then we started doing other ads.
So that first one was just that book, me sitting at the desk in my office.
And then the second one, which was totally different, was my brother and I, who, my brother runs our marketing.
So he and I were out on the street in San Diego and we started telling this story.
It just, we hadn't gone out planning to shoot anything.
It was just us and an iPhone.
And we started talking about this idea of how I used to send him personality tests to try to understand his disc profile so that I could go hire people that were like him because we always got along so well.
And so for my past businesses, my consulting firm, I wanted to find someone that was like him as a.
As a partner.
And so when we started trainingual and he got involved, it was funny.
We were telling this story about you can't replicate a person exactly, but you can replicate their results if you can document their step by step process.
And so we made, we just did this little 15 second ad of us holding up an iPhone walking down the street.
And that was really our first Instagram and Facebook ad.
And it was in a story.
And so it felt very natural, and people were probably like, do I know these guys?
Is this someone I know?
And it converted like crazy.
So that's when the wheels really started spinning.
Omer (40:55.060)
And the first ad you did with the E. Myth, was that also a video ad?
Chris Ronzio (40:58.970)
It was video.
Both were video.
We haven't done many photo ads.
It's been a newer strategy to do photos, and I think the photos work better for retargeting, but the video is more captivating for someone's cold interruption or, you know, telling them the first time about who you are.
Omer (41:14.050)
Yeah.
Okay, so, great.
So you're getting some customers in that first month, and then kind of what happened?
Because there was at some point, you hit this hockey stick.
Growth, right?
Chris Ronzio (41:24.670)
Yeah.
So.
So June came around, and we were getting more confident with our advertising.
So we went from spending 3,000amonth to 5,000amonth.
And, you know, I was doing the math, and I was saying, if we're acquiring customers even at $400 a piece, and we can three times that over their lifetime, that's an amazing return over a year or two.
So the decision I made was, I'm going to fund this thing as much as I possibly can with every possible debt vehicle I can get.
Because.
Because my credit cards cost whatever, 16, 18%, something like that.
But if I'm getting a 300% return on my ad spend, I'm gonna use every dollar available on my credit card.
So we kept increasing our ad spend.
3,000, 5,000, 8,000, 10,000.
So by June, we're up to 10,000 in ad spend, and everything's going well until the third week of June.
And again, our signups turn off.
And so we're like, okay, maybe it's the message.
Maybe we've changed something.
It's the audience.
What are we doing?
Come to find out the broken on mobile.
So we rolled out a tech update that taught us a new process for testing before we roll out.
But once we figured that out, once we said, okay, the product's stable, the funnel's working.
Let's just do this.
I got a tip from someone that said, if you've got an ad that's working on Facebook every three days, raise the budget by 30%.
And so I was scared because that's a lot of money.
But I said, said, let's.
Let's try it.
And so over the Fourth of July weekend here in the U.S. every three days, we raised the budget 30%.
And right after the holiday, we got flooded with orders.
So we had something like, 60 signups in a week.
And our best previously was maybe 12 or 15.
And so that's when we knew, all right, there's interest in this product, and we need to capitalize on it.
So let's go.
Omer (43:18.330)
Wow.
Now you racked up some serious credit card debt doing that, right?
Chris Ronzio (43:22.410)
I did, but I'd recommend it, you know, if you've got something that's working like that, if you're funding your ad spend and you know that it's an investment.
Then again, I was doing the calculations of what's the value of a SaaS business.
It's some multiple of your ARR.
And if our MRR and our ARR were growing so rapidly month over month, the valuation on the company was skyrocketing.
And so for me to go take equity financing when I still had debt available to me was crazy.
And so I set out to find every debt vehicle I could.
I used the Cabbage Loans and fund box for funding receivables, which I didn't even have.
But it was from whatever bills we had in the consulting days that we just left in our accounting system and collected against.
We had credit cards that I was just.
Just signed up for a couple more cards.
We had American Express line of credit, and it was just, let's take it all and let's use it all, and we'll figure out what to do once we have a bigger business.
Omer (44:25.710)
And didn't you get to like, something like $300,000 in credit card debt at one point?
Chris Ronzio (44:30.270)
Yeah, it was.
It was about 320, I think, was my low point.
And I had conversations with my wife along the way.
Maybe not all the exact numbers, but we talked about it kind of, where is the line?
How far are we going to take this?
But she was bought in, and she believed in it, so.
So we went for it.
Omer (44:46.140)
And this wasn't like you starting out with an idea and no customers and saying, okay, I'm going to spend all this money.
This happened after you'd got the Facebook ads working, and you were seeing what it was costing you to acquire a customer.
Chris Ronzio (45:03.260)
Exactly.
Once we figured out the funnel and we started pouring money into it, we were growing at over 60% a month.
Month for a few months.
And then we.
We kept it in kind of the 40% a month through the most of the last year.
And so just seeing that kind of growth month over month was.
Was just a constant validation that, you know, someone wants what we're doing.
Omer (45:27.940)
And what kind of churn did you have at the time or did did it play out in terms of the estimate that you had in terms of lifetime value for customers?
Chris Ronzio (45:39.550)
So Churn's interesting.
And my perspective on Churn is that Churn is something you can kind of experiment with.
You know, if you're spending a bunch of money on some new channel that you've never done before, then you're going to evaluate Churn there separately than the channel that's working for you.
And so Churn is kind of like a maturity metric.
And so in the first year of a business, I heard on some Saster post or something that if you can get $1 back for every dollar that you spend, you know, $1 in lifetime value for every dollar that you spend, or if you can get it, you know, best case a 12 month payback period, you're doing something good.
Because the money you're spending to get the word out there, even if the customer that signs up isn't the best customer, you might have had 20 other people see it that are going to sign up a few months from now.
And so it's this, this exposure, this long tail of the exposure from your ad spend is almost more important than your initial customers that sign up immediately and churn out.
The other component of Churn is we had a system where you had to put your credit card in in order to get the trial.
And at day 14, you'd be charged.
You get a two week free trial and then you're charged after the two weeks ends.
And because we auto charge at the end of that, you know, they opt into it, they check the box and it says it clearly.
But because we auto charge at the end of that, there's a handful of customers that are very aspirational about wanting to document their business, but they let a month go by and they did nothing.
And they let two months go by and they did nothing.
And then maybe they cancel and say they'll be back later.
And so of course that is going to heavily drive your overall average Churn down.
But those customers are still paying a good portion of your ad spend to recoup the cost that it took to acquire them.
So in a business's first year, I think Churn is important to watch, but I don't think you should be scared by it because the net effect of getting your message out there, I think is powerful.
So we watched Churn.
The biggest problem we had with Churn was once we brought in those floods of new customers, we saw Churn increase and we reached out to the customers and found out why.
And you know, the biggest reason why was that they didn't know how to start.
It was kind of a blank slate.
They didn't know where to start.
And so in the fall, we started releasing templates, and we started a certified partner program, and we started doing setup sessions.
And those are all things that you learn because you get the feedback from the customer.
So it's been amazing to get that feedback.
Omer (48:09.780)
Yeah, that's quite a story.
I feel like we've just scratched the surface.
My God, it's like we could talk about this for longer.
We should wrap up.
Before we go into the lightning round, you gotta tell me the Michael Gerber story.
How did that happen?
Chris Ronzio (48:24.900)
So, again, one of the people that commented on our ad said, you know, Michael would love this.
And they were a longtime coach through his organization, and so they signed up one of their clients on Trainual, and their client was loving it.
And so a couple months later, they.
They said, you know, I think you guys should meet.
You guys should talk.
And he introduced us.
So we got on a phone call.
This was January of 2019.
We got on a phone call and we talked for, you know, we were scheduled for a half hour.
We ended up talking for something like 90 minutes.
And he said, how soon can you get out here to California?
And I said, tomorrow.
I don't know what was on my calendar, but I said I'd make it happen.
So I booked a flight out, spent the day with them, really got to know their, you know, what they're up to and their mission for, you know, impacting small business around the world.
And it was so aligned with what we were doing with Trainual that I said, we have to work together.
So now we are doing some collaborative marketing efforts.
We've got a funnel together.
We've got some videos and a course we shot together.
And it's amazing to be working with the guru who kind of started the small business systems movement back in the 70s and taking that message forward today.
Omer (49:33.160)
Love it.
And it would never have happened if you didn't push yourself outside of that comfort zone and do that video.
Chris Ronzio (49:38.920)
Right?
Exactly.
Exactly.
Omer (49:40.280)
Awesome.
All right, let's get onto the lightning round.
I'm going to ask you seven questions.
Ready?
Chris Ronzio (49:45.800)
Let's do it.
Omer (49:46.560)
Okay.
What's the best piece of business advice you've ever received?
Chris Ronzio (49:51.000)
Your network is your net worth.
Omer (49:54.120)
What book would you recommend to our audience and why?
Chris Ronzio (49:56.760)
Built to Sell by John Warlow.
I think he's been on your show before, right?
Omer (50:00.280)
He has, yeah.
Chris Ronzio (50:01.640)
Amazing book.
It's such an easy narrative.
It's a story.
You can read it in a couple hours on a plane.
And I think it tells the story of the problem every small business owner faces, which is your business is worth nothing unless you put attention into your systems.
Omer (50:17.300)
Yeah, exactly.
I really like both that John's book and the E Myth.
I think the E Myth is, you know, if you're kind of running a business and you're kind of feeling overwhelmed and struggling, I think the E Myth is a great book.
And with John, the build to sell, I just think it makes you think completely differently about how you build your business.
Business.
Right, Right.
Chris Ronzio (50:40.720)
Because even if you don't want to sell, you want to build a business that could be sold.
You never know what's going to happen.
Omer (50:46.000)
Totally.
Yeah.
So if people want to check out the interview with John, it's episode 71.
I think that's worth listening to.
Okay, great.
And so what's one attribute or characteristic in your mind of a successful entrepreneur?
Chris Ronzio (51:00.720)
Fast execution.
You have to do things.
You can't just talk about things.
That was actually what Michael said to me earlier this week.
He said a lot of people read the book.
You did the book?
Omer (51:10.000)
Ye.
What's your favorite personal productivity tool or habit?
Chris Ronzio (51:14.460)
This is a strange one, but I'd say Peloton, the bike, the app.
It's amazing.
It saves me so much time to just work out in my house.
And the gamification is really cool.
Omer (51:25.500)
Cool.
What's a new or crazy business idea you'd love to pursue if you had the extra time?
Chris Ronzio (51:30.380)
Which one?
I've got a huge list.
My brother and I were joking this weekend that it'd be cool to have a funnel analyzer tool where you could subscribe to someone's newsletter or something, a SaaS product, and it would just analyze.
You know, you got this email on this day and then they waited three days and then they sent this type of email with this call to action and then they waited five days.
So kind of like a reverse campaign builder.
Omer (51:54.440)
What's an interesting or fun fact about you that most people don't know?
Chris Ronzio (51:57.960)
I can spin basketballs, like everywhere on both hands at the same time on like a toothbrush, from my mouth, behind my back, under my legs.
Wow.
Omer (52:09.710)
You should do a video on that.
Chris Ronzio (52:11.630)
That's a good idea.
Omer (52:12.750)
And Vani, what's one of your most important passions outside of your work?
Chris Ronzio (52:16.350)
Family, definitely.
We love to travel together.
We hike around the mountains here in Arizona.
But spending time with the kids is amazing.
Omer (52:23.710)
Love it, Chris.
Thanks, man.
It's been pleasure.
I really do feel like we just scratched the surface here, but thank you for sharing the story and some of the mistakes that you made and sort of digging into sort of the ad strategy and hopefully people will get some ins there and maybe some inspiration to go and try something different in their business today.
If people want to find out about Trainual or try it out, go to trainual.
That's train u a l.com like manual trainual.
And if people want to get in touch with you, what's the best way for them to do that?
Chris Ronzio (52:58.490)
They can go to chrisronzio.com or look me up on Instagram or Facebook and I'd love to connect.
Omer (53:03.850)
Awesome.
Chris Ronzio (53:05.530)
Great.
Omer (53:05.890)
Thank you.
I wish you all the best.
Enjoy your time in the Design Pickle offices.
Say hi to Russ and all the best.
Chris Ronzio (53:14.150)
Thanks, Omer.
Omer (53:15.110)
Cheers.
